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tv   Street Smart  Bloomberg  December 5, 2013 3:00pm-5:01pm EST

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>> the world'stwo most important phone companies are on the verge of an unprecedented deal. world's two most important phone companies. .hen, checking into cape town the ceo of marriott international on the deal that made him one of the biggest
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hotel owners in africa. alien cell phone locations every day? new allegations about nsa surveillance that will shock the system. >> from bloomberg world headquarters in new york, this with trishmart" regan and adam johnson. x welcome to the most important hours of the session. we are scouring every market for your last rate of today and first rate of tomorrow. all whole lot of economic news out today and a lot of that looking good. -- we are scouring every market for your last trade of today and first trade of tomorrow. showing you the three charts. down on the s&p 500 about half a percent, in spite of the strong gdp print. and we know why. take a look at the 10-year.
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may suggest we are tapering sooner. that is why the yield is up. 2.86 is the yield. you can see the spike in the middle of the chart from this morning. finally, natural gas. a lot of people in the midwest are going to get hit, it even down into texas with a lot of freezing rain. you are watching us, get home safely. that is why natural gas is biking. inventories are drying down. >-- drawing down. >> we want to start with microsoft. the ford ceo once again talking about potentially leaving and being microsoft ceo. once again, the nagging he is going anywhere. at only is he denying it, but board member says he will stay in the contract until the end of 2014. the stock still taking a hit on that almond down about two percent. dollar general one of the best
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performers in the s&p 500. the company coming out with third-quarter earnings that raise estimates and raised the full-year estimate for the full year. more woes for jcpenney. down nine percent after kyle bass says he has exited his entire stake in jcpenney's. still owns the debt, equity of the equity stake. down nine percent after kyle bass says he is exited his entire stake in j.c. penny. the epic tale that is almost real. china mobile with its 700 and 89 million customers won government approval to start service on a 4g wireless network. the market clearly hopes it can take more share. soaring to new 52-
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week highs. here to explain how a deal between the two most important mobile phone carriers, companies change yourt might world, we have brian marshall, senior managing director her. jonathan heller. , a principal at wedge partners. china, a huge opportunity. what will it mean for apple if this happens? >> it will only need a little bit out of the gate. this will be a very expensive phone. they do not subsidize handsets the way they do in the united states. it will be a $800 purchase for consumers. it will be meaningful but maybe 18-20,000,000 units next year. >> 18-20,000,000 units? right now there are 12-
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13,000,000 units that have been sold that are on china mobile's network that have come from hong kong, kind of through the back door. total about 20l next year, which is still a lot. >> what about the plans for emerging markets? >> we are probably more bullish. and you think about it, this is a huge deal. apple has 280 there's -- carrier planets. that is about 4 billion units. it is almost 800 million. obviously about 180 million are high value subs. equivalent of at&t and verizon. when middle-class is 11,500 u.s. dollars on the how can you possibly expect to sell millions of phones?
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>> i would not underestimate the capacity to purchase apple products. a huge status symbol over there. there are are ready tons of phones on the network. >> not as big as samsung. it is the brand in china. you have galaxy offerings that are half the price of that. people are buying these in droves. you cannot look at the carrier sized and say it will be 40 million units. you have to look at the consumer trends. the big area bowl is with -- is willing to work with consumers. product. a luxury the people that can afford it in china right now, probably at least half of them are buying it. we think it is great for distribution and retail. i think they will sell a boatload of phones. i think the protections are maybe a little high, but i think
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it is a great market for apple. i think the apple -- apple finally has the infrastructure. how many do you think they could sell? >> i think 30 million. >> apple last quarter sold like 45 million. so it is basically -- >> globally or the u.s.? >> globally. >> globally they sold 33 million iphones, and you are saying they are going to do 18-20 annually in china. >> we project 100 84 million iphones. low double digits. that does not include china mobile. it would be incremental to that. five is actually not all well-loved product in china. stance forthe c
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cheap. anyone who travels in china, they will say something similar. people want the 5s. it is not popular in china. it is not popular asia-wide. >> where might it work? >> it is doing ok in the u.s. -- >> it is so expensive. >> if it was a $300 phone, that would be different him up at the bottom line is, i believe apple has low word production of that phone and raise production of because i think they underestimated how popular it would be. >> where do they do better in terms of margins? >> probably the older phone. but better margins? >> and a cheaper case. >> it is cheaper to make because of that, and because the components are a year and a half old. come in at ay have
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much lower price point? >> the answer is yes. you saw it reflected in the stock the day they announced it, the stock dropped. as soon as they announced the pricing for it. apple is making a decision to preserve gross margins. if they want margins back up, they have to offer them at a higher rice point. price point. >> they are in tandem doing a new phone number of brand-new model. >> should they have lower the price? >> i do not think so. i do not think they would have done that because of the hits in margin. it is not very apple-like. wayin other words, not the to run the business. it is a quality perfect. willing to give up some sales for a quality product. icahnt me push for carl -- make a segue for carl icahn.
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does that make sense? >> apple has way too much cash on the balance sheet. an unused -- underutilized asset that is wasting away. last quarter the bot back 5 billion in stocks. they paid 3 billion in dividend. that i is more or less cash flow. >> why not go out and buy other companies? >> they have been. they bought topsy. they bought the company from israel -- out of israel for like 3 billion. -- read hundred million. hundred million. >> i think it will probably get more mileage for tim cook if it is a private conversation. it looks like a war. he looks like a major shareholder having a war. they will not relent because you
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have a local shareholder. >> he did have dinner at his apartment. he told us about it. yes, to your point, it is very public, but it looks like he is willing to meet him halfway. two new companies now. what are they going to do with them at? >> i think topys works its way into syri. i think they can draw from the keywords and information. doing a lot more on television. i think it will be a vehicle to enhance theory. that is something that could be in tv. something motion- based in the years to come. >> and other words, i pick up the iphone and save what is jonathan keller saying about apple? they will use the technology.
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they could actually go immediately to the live feed? we are on my. if you could say i want to see brian marshall? now? boom.ller right >> that is the next th. they will want -- they will get it for you. that is the next step i think of what they're going to do. >> agreed. >> very neat. that day.t for coming up, there is a way to have your cake and eat it, too. at least according to ajay. he will explain. why does mercedes have pertained different cars when four models my have been just fine? today's -- the answer in today's global outlook. ♪
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>> what if we could have our cake and eat it too? time for insight and action. this is what prompts the question. -- loeys writes think aboute, let's that. value and momentum. value says something is cheap. momentum says price is accelerating. how could you necessarily have value and momentum in the same stock? curious. here is what we did. we try to figure out if it is possible. we started with the s&p 500. then we narrowed it down to the lesss trading with a pe of than 10 times. there is the value component.
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only 53 made the cut. looked at stocks that are trading it in three percent of the 52-week high. there are only 11. you can have value and momentum together, but it is pretty tough to find. only eat lead and out of 1500. there they are. gm hartford, hewlett-packard, seagate, and western digital. i know i went fast, i just posted them before the show on twitter. here is why we care. this is why maybe we really can't have it all. thank you for pointing this out. value and momentum, that group 79% year to date. versus the s&p 500, 27%. cake, and to have my eat it, too. not bad.
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our closer says the economy has 20 of momentum. is loftygh there expectations for tomorrow's jobs report, she believes the expectations will be met. she is a bloomberg best for her stellar forecasting ability and .our -- and a senior economist welcome back. last jobs report of the year tomorrow. lookdo you think it will like? >> all of the other labor market data that has been coming in has been coming in very healthy. expectations are also very lofty for tomorrow's report. the supporting data says we will get a nice, big support. at 190 five, slightly above consensus. in, coalescing around the 200,000 level. if it comes in around that mark, markets are expecting that kind
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of number. you set yourself up for a big knee-jerk reaction if we do not meet that number. that said, we are trading down because there is good economic data, and everyone says we will pave her sooner than perhaps the market was like. so if we get the week report bar roque, it might not necessarily be the worst thing for the markets. quac >> weak or strong, it will not change the view of when he believe we will get tapering in march. by the january meeting, what is janet yellen and crew owing to be looking at? at gdp print around one percent. she says the aa-yellen prescription has been they want strong growth and strong payrolls at the same time. by the march meeting, they roll -- payroll tracking three percent or better.
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where she testimonies can prepare financial markets for tapering. and usually at least one banking committee testimony in their. some biggies where typically the leader of the fed will use those to signal they will do something. i think she will wait for those so she can set it up or march. >> ben bernanke first mentioned the taper word. do you think janet yellen will be different? she will have learned the lesson and not guide the markets one way and then effectively switch course? >> i think what we are seeing as she has are ready learned that lesson. spirit, if anything or just in posturing from around the table. i think we saw that in the minutes. this is a fed wringing their hands over. how do we convince financial
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markets that we will do whatever it takes that tapering has nothing to do with the rate hikes. i think they have had success and she will continue to drive that home to markets. >> one of the big challenges will be communicating with investors. the expert nation is we would get the taper and it did not happen. overwhelmingly thomas people thought it would happen. overwhelmingly people thought it would happen. traders might say how can i do one thing when the fed is telling me and then do another? kind of thingthat occurring, and they will start to run into the chance of losing credibility. again, you have a yellen-flead fed that will be more careful. that is why we stick to the march call. i think that is why they're
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pushing up expectations and will not happen. closer, theur economist at morgan stanley. we will explain in today's global outlook. " next.street smart." ♪
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>> if you have been in the market for a mercedes, you may have noticed there are a lot of options out there. sam grobart looks at why luxury cars have been multiplying in. >> with the release of the new sedan on the mercedes sells by my count or team different cars in the u.s. everything from that to the hoop-level to the $215,000 . 25 years ago, do you know how
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many models were sold in the u.s.? four. it is not just a three-point star that has been multiplying. audi and bmw have been going at it like rabbits, to. -- too. the first reason, there is a whole lot more competition now banned in the 1980s. you have lexus, infiniti, $60,000 hyundai's. with the increased competition, you have to go out and find as many new westerners as you can. that means cutting into them -- cutting up the markets into ever thinner slices. which you can do with new data and identify new subgroups of and tumors. now it is easier than ever for a carmaker to spin off different models using the same set up our . things like the chassis, engines and components can be shared so each model does not require you to start from scratch. it also changes the math that carmakers use. toin the olden days you had
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sell 100,000 cars to break even, $30,000can sell cars at at three each. mercedes stopped selling the wagon and several other automakers have various -- very curious offerings as well. very clever things you can do with components and platforms but it does not always mean --
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>> edward snowden, you sure have made things complicated for the nsa. just this week we learned three things. the agency is tracking 5 billion locations of cell phones per day. the u.s. and sweden are spying on russia and doing it together. saidly, " the guardian" only published one percent of the 58,000 files it published. edward snowden is playing drift torture with the nsa and all of us but it may be our privacy
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that is thegood -- victim. joining us is james foster. 5 billion is a big number. how concerned should we be here? consumer,r typical you should not be concerned at all. this is something that has been going on for a while in terms of not just governments, but social do thisand isp's today and have been doing it for years. i would not be concerned by this release in the slightest. i do not like the nsa tracking exactly where i am at any given moment. it just does not sit right with all. >> i agree with foster in that this is not something that is a bombshell. it adds fuel to the fire. collecting nsa is
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massive amounts of information. 5 billion is a lot. when you turn your cell phone nsa can knowly the where you are, at least for now, it is only taking place overseas and does not seem to be in violation of any domestic laws to protect the privacy of americans, even though when they do this abroad, that includes americans who may be traveling abroad. this is what has happened since post 9/11. it has been going on for a decade. >> certainly we realize we ought to give up a little bit of liberty in order to reserve security. i think everyone understands that. how we eat is a cell phone? is there a way i can turn it off? than your more leaky
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social networking site count. i can tell you that. it is not a cell phone anyone is monitoring. when you install foursquare or twitter, they aren't tapping into the same generic functionality. it is the chip. they have chips. take it out and put a new one in. >> do you think people just need to realize this is the world we live in right now? having a phone location is an easy thing to follow. basically have access to a lot of information that you would not want them to have access to, but is for the overall good of society in that hopefully it will prevent another 9/11? >> that is basically the logic. you are scooping a lot of
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information. most of it is irrelevant. occasionally someone you are watching you find it makes a series of calls to the same person in the same location and that says something funny might be going on here and you watch it more closely. after 9/11 in the united states we have been willing to sacrifice a certain amount of five the sea for security. i think in other parts of the world, particularly in europe, that did not experience 9/11, that has not moved to the same degree. are is one reason you seeing considerable outrage across many european alex. european publics. viewers sent us a note. he writes -- ben franklin admonished those who would sacrifice liberty for security thomas a yang sooner
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than not they would find they have neither security nor liberty. are we running the list -- the risk of the slippery slope? at some point, we run into a situation where they are tracking things they just simply should not be tracking. isi think the united states going through a rebalancing act. the united states put a task force together to look at the laws we have made since 9/11. do not forget, the laws we have made today have been pushed through by congress, who was .lected by the people and the president of the united states, saved -- elected by the people. >> even president clinton thinks we have done damage in the ?nternational community
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>> i would not call the president wrong in his beliefs. i think he had a great term. i think he had different challenges. i think we have serious international perception problems and trust issues we will have to rebuild. >> i recently sat down with the nsa director. talked about what the nsa could and could not do. he spoke a little bit about the technology involved. i would like everyone to take a quick listen. have great insight into terror risk. if a terrorist is calling into the united states, have you know if that is a good number or bad number? the nsa has the job of figuring out if it is about person calling, and give it to the the eye. this is hyped out in the press. everyone says they must be listening to everything. we are not.eally nonetheless, a ton of bad press of snowdens a result
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and all the attention. how did they come back this right now? combat this right now? >> the intelligence community as a whole has realized in the wake of this one of the things they are looking to do at the front is represent a spokesperson, someone who has a common front they can put forth the message and real facts from fiction for the intelligence community as a whole. i think that is one of the things they will do in the wake of snowden. foster, thank you for joining us. willrriott international become the largest hotel chain in africa. we're speaking with the ceo about why he is doubling down on the emerging market next. less, the first analyst to cover bit coin. the merrill lynch head of global today at
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we will see you back here. ♪
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>> the nasdaq has had some see --
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serious glitches. what made you decide to change? >> they are very persuasive. they have been encouraging us to come over here for a number of years. >> there you are, now being traded on the nasdaq. talk about africa. this is a pretty big deal. what is it that is appealing to you about africa? isin many respects what happening in africa is like what is happening in the rest of the world. we see governments get to a place of stability in many places. we see the middle class grow, commerce grow. with that, we see travel grow. folks in africa traveling outside. we want to be there in be part of it.
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opportunity?bigger >> i think it is like emerging markets. sub-saharan africa will see their bleak tree hundred million folks in the next 10 years or so. that makes it a substantial enough market to play -- pay really close attention to. latin latin america also has great growth statistics. >> why not build hotels from scratch rather than go out and pay a premium for an existing hotel operator? deal we do we have a partner. it is not an option to build 80 hotels by ourselves. he do not know how to build hotels in that market. that is something best done with local talent. we are stepping in and buying
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the most established brand in south africa with about 100 15 management or franchise contracts in place. we are not fighting the br -- buying the bricks. this gives us people to manage the hotels we already have in the pipeline and continue to grow africa. we think it is a relatively easy deal to justify. >> how much did you wind up hanging? can you give us a ballpark? >> not until we close. he have very detailed documents that have been signed, but we will not close until early 2014. the press has said around $14 million. that is not a bad approximation, but we will not give details out yet. >> in other words, a big opportunity because it is the primary brand right now. will you change it to make -- marriott? >> we will keep it. we think it is a very strong
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brand. three, four, are five of the existing brands that we think we can convert to our brands. we think both create more visibility for the brands we already have in that market and probably provide list to the performance. under mentally it is about building the brand in using the experts they are ready have on their team. you actually operate 18 brands. another big rimmed out there, .ilton, launching its ipo a big announcement. potentially 19,000,000,000- 20,000,000,000 dollars, which would make it the largest publicly traded hotel operator. it is overwhelmingly good news for us. we are pleased to have helped and come back to the markets. a very healthy competitor of ours. there are two things we like about this. one is, we will get more
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information about them. he are competitive, and we do want to win. we like that we will be able to see cord early numbers from them. it will make the hospitality space that much more relevant in the market as a whole. i think that is a good ring. we are excited about our business. we want people to pay attention to our business and invest. i think having hilton in the market will help that. economicid get good data out today. g right hilton ipoin now. how would you characterize what we are going to see in the global economy and back here at home? > >> the globe is a big place obviously. you start with the united states , it reveals an economy that is probably recovering. probably not as quickly as from prior recessionary environments, but still broadly recovering. most industries, most parts of
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the united states. we continue -- we expect that to continue in 2014 and beyond. we have more confidence today that europe has hit bottom and starting to move from that, albeit very slowly. i think a year ago we would have thought is it possible they have not hit bottom yet? we would have had less confidence about that. aresia, china and india less great places. they are wrestling with local issues that are a bit different from place to place. >> an optimistic tone from arnie sorenson. closer feeling pretty good about 2014 as well. she has charts to prove it. we will explain in chart attack. we will be right back. ♪
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>> time for chart attack where we show you a couple of charts today that will make you smarter. ellen zender you say the world
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is getting smarter and the charts to prove it. >> that is right. a pretty good outlook for 2013. we will show you we swallowed a really hard pill. a big hit to government spending but a sharp improvement in the deficit to gdp ratio. we do not have to swallow the pill again in 2014. we have reset government spending out lower levels. we did not have to do it all over again. makes for pretty easy comparison year-over-year when you compare 2014 to 2013. sex we are running less of a deficit. that is good news. what if you drill down and talk thet individuals? >> it is verge because of the wealth effect. rising. have been consumers are at the upper end of the spectrum and have been really getting the benefit of higher net worth. here is net worth as a percent
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of disposable income. we have seen very sharp improvement that is driving the spending we are seeing in the economy. >> in other words, the total net worth is 600% of what you make. if you make 100,000, you are worth 600,000? >> exactly. s&p is up. equities are up. general home price valuations are up. we have been covering a lot of the lost wealth. five years after the financial crisis, we have recovered a lot of the wealth. the dominant theme for spending in 2014. >> that is very good news. we have breaking news i want to share with you on time warner cable. we have reported a number of inle carriers are interested comcast communications. according to bloomberg news, time warner is said to likely accept a share offer between 150 and 100 $60 per share for the
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company. right now trading around 130 four. that news breaking on time warner cable. we will be back with the close of trading right after this. ♪
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like if you missed everything that happened airing today session, we are getting you caught up on the only stocks you need to know about. number 10, dollar general up more than 60 -- six percent. reporting third-quarter profit of $.72 per share, beating estimates of $.70. dollar general says traffic lines and shoppers spent more per transaction during the quarter. looking pretty good.
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better than walmart has. >> kroger down more than four percent. net income fell nearly six percent early due to the cost from the pending acquisition. they are bolstering appeal were trying to bolster the appeal, purchasing an upscale food retailer. obviously it is taking an impact. up in columbus, ohio, you would have a stronger appreciation. >> electronic arts is number eight. the website reporting technical problems with battlefield for may delay future releases of the game. four.ttlefield one of the best-selling videogame franchises of all time. >> you are really big into videogames. >> moving on to number seven, costco.ds, limited and
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both falling. i felt like i should say the company formerly known as the limited. it was a nickname. it was not quite the same. as bad, butt almost. >> just does not sound quite the same. the sales fell five percent. 1.2% him at the decline estimated by analysts. sales at costco rose three percent less than the average projection. analysts not getting what they want out of these companies. l brands and costco. shares are down eight percent. surprise it is not more than that. the shares are down eight percent. a bank down a
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fraction after disclosing that ohio's attorney general is looking into some of the advertising and marketing practices. earlier today the ceo, neil black, said the company will value it the 1.5 billion dollar buyout offer from the larger offer, men's wearhouse. >> he also said -- if i could aree in, he also said they looking at other acquisitions. joseph a bank made an offer from men's wearhouse. now joseph a bank says it is considering that in looking at making offers -- considering offers from other companies. >> number four, new ones to medication up a fraction. communication up a fraction. carl icahn has boosted his stake to nearly 19%. he has been steadily acquiring shares since he first revealed a nine percent stake back in
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april. speaking of bad names. slightly different than everything else? >> like you, very subtle. eropostale. the down two percent as the company reports a loss in the third quarter ended dismal outlook for next. they are dealing with cautious spending among young shoppers. >> number two, disney up nearly happened percent. raising >> coming up on our number one stock today. it is apple. up about a half% as the company inches closer to reaching a deal with china mobile. the carrier with 759 million customers has government approval to start service on a 4-g wireless network.
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trade, fifth straight day of deadlines. we are going to get some contacts on today's market. we had a lot of good economic news, the g.d.p. coming in well. what do you know you get a sell-off? >> you know what i am going to say, and matt is going to get mat at me for saying it. >> i am not angry with you. >> yields are up, so obviously treasury investors think that yields are going higher and interest rates are going higher if the economic data continues on this pace. one economic report does not make the fed do something. it is a trend. there is this leaning towards rates going higher, and rates going higher has a ripple effect in the stock market where you see prices come down. >> we have seen a steady trend of declines over the past few days. i think it is funny when one day the market is up because we say the taper is not coming, and the next day the market is down because of taper talk.
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you could use taper talk every day. >> it has become the word of 2013. >> jargon. >> it is like the self-y, taper, taper. >> that is going to be the o.e.d. word next week. >> it is time for the round-up. these are the stories we are talking. we are joined by a special uest, host of bloomberg tv's program, jeff is here. >> i am ready. >> matt, you are first. >> i want to rip up the script and ask jeff about these horrible names. can we do that? >> do you know why they have l brands? because w was already taken. the alphabet was gone. >> why not victoria's secret? >> they own that. >> yes. >> some were telling them that limited was limiting them. that is what they tried to do. they tried to upscale with the
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l. i am sure that is what they were told. it just seems like a stupid name. >> it is actually 63% of their sales. it is the biggest part of their business. they are a winner. >> can you by that spinning top thing she is wearing? >> i hope no. >> i just want to point that out right now. >> let me get back to business. i saw down with alan. the company introduced a brand new mustang as part of the one ford plan. his name has been talked about as a replacement. >> if i get it next fall, can you tell me you will still be in the c.e.o. set next fall? >> i love serving. > you have told me in the past i would stay until at least the end of 2014. >> i love serving ford, and
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there is no change in the plan. >> but he has no contract. >> a pretty good non-answer. he doesn't have a solid contract. bill ford and the ford family loves him. who wouldn't. he has done a tremendous job. >> he navigated ford through the crisis. never had to tame government money, unlike g.m. >> he made some incredible cars. the first car he made was the taurus. that was awesome. thin he made the fusion. and now the mustang is so hot. what do you think about it? >> he doesn't have a contract, but i think he is a man of his word. it is interesting for them to be able to say he is the favored girl at the prom. that is what you are seeing. other companies are going to be looking at him as well. he is sitting around looking at offers and seeing what he wants to do. no promise. >> look, no change in plan now. but if bill gates comes along and says i am going to give you some obscene amount of money.
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>> i am changing my name to alan. >> if you are bill ford, don't you want to lock him down? >> maybe bill says he has done a great job for the company. he has always put in a fantastic management team and a succession plan. mark fields is a genius, too. jim fairley is fantastic. >> yeah. >> make microsoft wants him to do the same thing there. >> perhaps. >> ready for this? may not be mulally walking offer the job, but fast food workers are because of wages. it started in new york city last year. it has grown to about 100 city. in some washington are behind the workers. 53 accept a letter to mcdonald's, yum brands and others calling on companies to increase employee play. obama jumped in. he said they work their tales
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off and live barely above poverty. $10:10 support a minimum wage. they want $15. >> they want $15 minimum for any worker. >> think about this. if you had any relative that was working negligence a full-time job, one of these jobs, would you want them making that wage. >> the average wage is about $8.9 in these places. you are looking at $16,000 or $17,000 a year to make a living. nobody can make a living at that rate. >> if we all agree it is not going to hurt the economy to raise the minimum wage, why don't we raise it to $50? that is a much better idea. >> hang on. hang on. >> let's mac it $500. >> remember this. it is true if people make more, they are going to spend more,
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but it also means prices are going up. those dollar meals at mcdonald's, they won't be a dollar anymore. >> that is the rhetoric, but we don't know that is the reality. >> if you owned a small business, and you were going to pay someone $50 an hour, and i am just throwing that out there versus minimum wage, you are not going to be able to afford many people. >> i own an office -- >> hang on. >> i have own small businesses for years. i would never pay this kind of wage. even today i won't even pay an intern $10 an hour. >> no one is limiting you. you should pay a living wage. regulating is another story. >> i agree with you there. they don't need to regulate it. i just think they need to pay fair wages. >> agreed. >> but they are not.
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>> let my say if all fast food workers in america stayed on strike forever, it would be a better country. right? >> we are going to leave that there. we are being told to move on. >> julie take it away. we wouldn't have the obesity problem. >> let's move on to twitter, matt miller. twitter has selected its first female board member. marjorie ed scardino, citing lack of women in high positions. last wiegele, sally called the absence of women on twitter's board a joke and said that silicon valley was no better than wall street when it came to female representation. she wasn't the only one. a number of people in the tech community were calling twitter out. people today are saying it is a token hire, but it is better than nothing. >> it is not a token hire. i am going to defend twitter
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here. one third of their company, executives or board is people of color or women. that is pretty good for a young company started by three men. you look at the other tech companies out there. how many win are on facebook's board, amazon, yahoo? only one woman on each of those companies outside of the c.e.o., outside of an executive. i think the bigger question here is that women aren't on most boards. it is the slowest turnover on anything. i love to get on boards because i am on there forever. they never leave. only about 1% to 2% of boards are turning over. >> and there are not enough women in management. that is an ongoing problem for sure. but it may be starting to change. you look at the enrollment in business school and law school, and there are more and more getting the education. >> they took their time. they got a really talented person, a publisher, never
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tweeted before. she now has 2,300 followers. but she will get there. >> women didn't like it when chip wilson, the founder and hairman of lulu lemon said this. >> frankly, some women's body's don't work for it, the rubbing between the thighs the pressure it there. that is in response to me asking what is with the pants. this time back in the spotlight, it is in the store, and it is not the found tore play. a location in maryland has apologized for using chip's comments as part of a store's promotion. a twitter user captured the , and it der which said
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said this -- >> thankfully you have had too much by and thighs are rubbing together. lulu lemon has women running the company? >> yes, for now. >> they should embrace it. >> i like it that their thighs rub together, too. i don't have a problem with that. >> think about all the adams you see for weight loss. you go into lulu, go to some yoga classes, work off extra turkey. we can help you. your thighs don't have to rub together. >> i am not going to comment. >> that is safe. ad plays it safe. here is a look at what is next on "street smart." >> businesscoin gets a nod from wall street. we've got the first analyst to put a price target on the
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currency. find out where he puts the price. hen a comb-over on a cover up. did donald trump defraud thousands who paid $35,000 to his university? the new york attorney general says yes. plus, if kobe bryant could pick his dream team, who would be on it? >> i will do magic, myself -- >> find out who made the cut and why lebron didn't. >> stay tuned four first trade tomorrow, all coming up when "street smart" continues.
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>> well, the bitcoin debate is heating up after former fed chairman allen greenspan told me this yesterday. >> you have to really stretch your imagination to infer what the intrinsic value of bitcoin is. i haven't been able to do it.
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maybe somebody else can. but if you ask me is this a bubble in bitcoin? yeah, it's a bubble. >> there you go. the first official words on bitcoin from a fed chairman. and we are about to break more bitcoin ground here because this morning bank of america, merrill lynch's head of global rates and currencies became the first wall street analyst to give bitcoin serious study and a price target, $1,300. he is here to break down his report and give us his analysis of whether or not there is a bubble. david wu. >> thank you. i think it is fair to say that bitcoin is something totally new. you can't basically give it a evaluation based on traditional metrics. this is like a three-headed animal. let's take it apart and assign a value to each of the three pieces where we think bitcoin has a future. the first piece is a means of
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payment on eerks commerce. let's assume that 10% of global ee commerce transactions go through bitcoin. we think that would be worth $5 billion. the second major role that bitcoin can play is as a basic means of transfer. >> so like a western union? >> yes. what i did was take an average market cap of western union, money graham and euro nex. i said what if bitcoin becomes a major player. that gives me another $5 billion. >> theoretically that is something we should see happen. it is very expensive to send money and there is a lot of time and process involved. here you can transfer money on line to a relative in another country seamlessly. >> exactly. say if you are a mexican construction worker in this country, and you want to send money home. you want to send it cheaply,
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and you may not have a bank account. for means of transfer, there is something to be said about bitcoin as a future. >> ok. >> the third a piece, the most interesting piece is bitcoin as a store value. how do you think of that? i think gold is a good example. gold has three things in come with bitcoin. it has a fixed split. bitcoin has a relatively fixed supply. two, it doesn't pay any interest interest, and three it is relatively anonymous. ight now bitcoin has a volatility about five times more than gold. for gold, it was about $1.3 trillion. you divide it by five and you get $300 billion. it took a long time for gold to acquire this reputation. >> it has stood had the test of
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time. >> yes. let's say bitcoin manages to get only the status of silver in our lifetime. silver is trading 1/60th value of gold. that is another $5 million to the account. that comes to $15 billion. right now the outstanding thing, bitcoin is $12 million, you get to $1,300. you u.s. dollar terms, are saying the $15 billion market divided by the number of bitcoins gets you to a value of around $1,200? >> yes. am not saying $1,200 or $1,300 is a forecast. it is a max fair value. you have to have 10% of ee commerce players. it is going to be one of the big players in the money
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transfer entry and is going to be like silver. >> so you go long bitcoin and short western union? >> we are not making that official call yet. this is something interesting. >> so you point to the volatility. gold obviously also is a pretty volatile space to be in. >> sure. >> depending on people's fear level tend to move higher when people are concerned about the future. is that something that we might see with bitcoin as well? >> i think that is exactly right. in some sense bitcoin's role as a store value is compromising its main role as a means of exchange. hat is already undermining its role. amazon is not going to accept bitcoins -- >> if your best case fair vull is $1,300, and we are there, you are saying you don't want to necessarily go long on bitcoin? >> right.
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i 0 duncan bitcoin may grow as a means of exchange. that is different than saying bitcoin is going higher. you have to assume that bitcoin is going to become a major player in other domains. from that point of view these expectations are lofty. >> but you would never see amazon accepting gold as tender. why would we ever get to a stage where this is really something that people trance act in readily online? >> well, in china for example, one company is accepting bitcoin as payment. >> not anymore, they have outloud it. >> no, for instance tutions. they are not saying you can't pay for something online. that is a different story. generally speaking, i think bitcoin has a role to play in countries where citizens face high taxes, high capital controls or confiscation risk. from that point of view that is interesting.
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>> you have mentioned china. they have come down pretty hard on bitcoin. >> i think so. 70% of the recent turnover in bitcoin exchange basically involved a cnyb on the other side. this has become an object of speculation in china just like other things, even garlic in china. >> people have made comparisons to tulips. there was a professor in the netherlands who made this comparison just this week. you would say no, don't worry about that it, is not a tulip? >> i think right now add today's level, a,000, you can't say clearly it is a bubble. this is where i would disagree with green span. this piece makes that point dwight well. >> david woo disagreeing with allen greenspan. we will be back in two.
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>> welcome back to "street smart." we had our fifth down day in the market today. trish, you look at where the market closed, the s&p 500 down a half percent. that means we are now down 1.5% over the past five days. >> good economic news. perhaps this is concern that we are going to see a taper sooner rather than than later. we will see how the job reports looks torle. we had an economist on earlier saying she is looking for 195,000 jobs to be added. it should would be good if we get around 2,000. >> it takes about 120,000 a month just to cover population growth. if we can get it up towards 200, that would be a big
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difference. >> yes. donald trump marketed his university with this line. he has earned more in a day than most people do in a lifetime. now he is willing to share with americans like you, but is it a hokies? we will talk about it next.
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>> did dronled trump defraud those who signed up for his university, some for $35,000 a pop? the new york attorney general said yes. phil, why is donald getting served here? >> well, again you have to read what the attorney general's papers contain. went through them very
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carefully. he has approximately 60 affidavits from people who took the courses. as donald says out of about 12,000 students overall. he thinks 65 affidavits of people complaining is a relatively small number, and i guess it is on a percentage basis. >> they came forward and said we paid this money -- >> we are not getting anything, none of the wisdom that donald was supposedly going to share with us about how he became such a wealthy billionaire real estate magnate. >> so he wasn't teaching the class? >> he wasn't teaching the class. he supposedly hand-picked the teachers, but a lot of the people who went through this felt as though they got rooked? >> how much was that for $35,000? >> that was a year. there were shorter three-class seminars were $1,500.
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you don't even get a diploma. >> you are the one who signs up and forks over the money. you know it is not an accredited program. isn't there some responsibility? >> there may have been some ambiguity about whether it was accredited program. obviously it was not, but they may have felt it was accredited. people thought they were really going to learn donald's investing techniques. that is a very interesting proposition for some people. i wouldn't fall for it. you wouldn't fall for it, and i certainly wouldn't write a $35,000 check. >> although the apprentice was very popular. >> let me get donald trump's side in here. he said this. i did this because i really thought we could help a lot of people, and we did help a lot of people. he helped some. >> what he says, and people out there can go to his websites created about --
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this called 98 percent approval. he has something like 10,000 of the 12,000 evaluation forms that were filled out by his students, and most of them give him excellent ratings and the people who are complaining now are complaining because the attorney general of the state of new york has given them an opportunity to get your money back and why wouldn't you if you can? >> he is complaining there was curious timing here, that this was handed down by attorney general schneiderman after a meeting with president obama, something along those lines? >> well, the donald has a fantastic ability -- >> to connect the dots. >> to weave a narrative where there really may not be a narrative. he said obama was in on this after a meeting that schneiderman and obama had one saturday or one thursday, and that resulted two days later in the filing of this lawsuit.
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it is obama's fault, born in the wrong country, not an american citizen, and now he is attacking the donald. nd he thinks that eric schneiderman is taking advantage of the publicity to raise his own level of name recognition so he could run for governor. >> that wouldn't be the first time. bill, you are going to enjoy this next conversation. it is bubble week here on "street smart." today we are talking i.p.o.'s start-ups an tech. tech startups with no revenue have billion-dollar evaluations. ?alking about you twitter angela, what do you think? >> it depends on how you define bubble? is it 2000 and evaluations are going to value off a cliff? i don't think we are there. do i think people are getting a
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little irrationally exuberant and pushing prices up, definitely. >> what else is out there? what makes you think this is a bubble? >> i think people aren't thinking about the next round. first of all, not everyone need to be the c.e.o. of a start-up. six million start-ups are started every year. is that a lot. >> is that more than the past? >> it is trending up every year. it is 5% or 10 p.s.a. growth every year. but with crowd funding, it is going to rapidly increase. >> to it is not a bubble yet, so we have certainly set the stage. >> absolutely. >> bill? >> i think val weighses are getting out of volley. you have snap chad where they turned down $3 billion even though they have no revenue and not much prospect for any. yahoo pays blr that $1 billionle for. it is a great tool, great
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network on the net. is there a business there? i am not sure. >> instagram was another. >> unlike in 1998 and 1998 eyeballs just had garnering things. >> maybe you can comment on this statistic. in 2012 i.p.o.'s that came to market one month later were up 12% on average. this year up 25%. that is twice. is that to you a sign of irrational exuberance? >> i think it is. there is a lot of money in the market right now, and i think it is -- you also keep hearing the buzz. we keep hearing this $3 billion snapshot evaluation on twitter. and people aren't hearing the other side of it. people get swept along in the excitement of it. >> the other side meaning of all the companies that go down the tubes without any evaluation? >> yes.
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six million companies getting started, 200 i.p.o.'s happen a year. you are 10 finals more likely to get struck by lightning. >> social networking is where you are seeing a lot of this? >> saying social network is almost like a four-letter word for early stage investors. socl, that is a four-letter word. angela lee, founder of 37 angels. thank you for joining us. >> tnk you. >> and bill cohen, thank you for sticking around. coming up, we are talking about two kings of los angeles. the court, and one on the big screened. kobe and kadzenberg. we have the details behind the idea to buy a chinese themed park?
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>> it's time everyone for the scene where we bring you the business behind media, entertainment and pop culture. we are bringing you kobe and katzenberg. a basketball superstar and a movie mogul. both are changing the game. first up, kobe bryant, the guard cosart down with jon erlichman. he joins us right now. kobe has been sidelined by an achilles injury, but he has been keeping busy off the court. what is he doing? >> he is always keeping busy. you are right, this is a city full of celebrities. this is a guy who stand out not just in basketball, but in
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sports around the globe. he is a superstar in china, where basketball is a huge sport. you are right, he has been sidelined with that injury, but he has had time to roll out his new nike sneaks, kobe nines. always a lot of fun stuff that you can talk to kobe bryant about. recently michael jordan made a lot of headlines for highlighting what his dream team for a pick up game would be. kobe actually wasn't on that list. i figured you know what, let's see what kobe's dream team would be. here is he had to say. >> i would do magic, myself, bill russell, kareem abdul-jabbar and larry bird. >> there you go. no michael on that list, but everyone needs their time with the ball, so you have to think creatively about who is on the part with you. >> i have talked to kevin plank about this. and they are trying to make some inroads in terms of basketball. what is it that the competitors to nike need to be doing in
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order to sort of take on more market share, especially globally? internationally is something i know underarmour is looking at. >> one hundred percent. the partnership he is go beyond being an endorsement deal. nike has led the way. it brings another storyline to these products. kobe had this big event here in los angeles, and it didn't feel unlike one of the big product events that apple has. kobe tells the back story on how he decided to design a shoe. he has been on this road to recovery. everyone wants to know when he can wear the shoes on the court. i asked him if he may be playing friday night? >> yes, i probably will be wearing them. i probably won't be on the court playing, but i will probably be wearing them lounging around. >> a lot of speculation on when he will come back, but he is
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hinting towards the weekend. i am sure the lakers would enjoy having him back on the floor. >> thank you very much, jon erlichman. ad? >> move over, america. before the end of the decade, the u.s. won't be the biggest movie market. that is according to jeff katzenberg. he was taking to josh. >> five years from now, china will be the number one movie market in the world. we are $10 billion in america today. they will be $3.5 billion this year. in five years they will surpass us, and they will surpass us in many of these ways just purely on the numbers. >> katzenberg was asked about bring dille. > bring, who is an amazing man, honestly without question,
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one of the most brilliant ople even to this day -- i still think he is one of the most amazing, brilliant, inquisitive, intellectual mean bastards i have ever come across. >> he wasn't the only executive katzenberg talked about. here is what he had to say about spielberg and david. >> to this day, even though david is retired, he is still the boss. i sent peabody and sherman over to him to look at it, to see if there is any last-minute coaching. that will never change. >> as c.e.o., dreamers katzenberg has produced it. he produced the croods and turbo. another one is due in march?
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will you go see it? >> i might. my girls liked frozen a lot. >> not my kind of movie. >> pimm fox is here right now with a look ahead to "taking stock." >> yes. coming up at 5:00 p.m., if you ever wanted to get a manicure but were too busy, two young women have figured out a way how to create a building, and they are building it one office at a time. more next on "taking stock," and more "street smart" coming up.
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>> breaking news, everyone. jacob zuma, the president of south africa has just announced that nelson mandela has died. let's listen information >> our nation has lost its greatest son.
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yet, what made nelson mandela made was precisely what him human. what we seek in ourselves. and in him we saw so murphy of ourselves -- so much of ourselves. nelson outh africans, mandela brought us together, we will together that bid him farewell. r beloved mativa will be accorded a state funeral.
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i have ordered that all flags of the republic of south africa from red to half mast , and to 6 december remain at half mast until after the funeral. we pay our last respects, and let us conduct ourselves with he dignity and respect that personified. let us be mindful of his wishes nd of the wishes of his family .
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erever we are in the country and wherever we are in the values et us recall the for which he fought. let us reaffirm his vision his is iety in which none xploited, oppressed or dispossessed by another. let us commit ourselves to sparing ether, neither strength nor courage to ild a unitted, non-racial, non-sexist, democratic and prosperous south africa. t us express each in our own
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way the deep gratitude we feel for a life spent in service of the people of this country and n the cause of humanity. that is indeed the moment of our deepest sorrow. the moment also be of our greatest determination, a determination to live as he has lived, to strive as he has until and to not rest we have realized his vision of truly united south africa, a
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, aceful and prosperous africa nd a better world. we will always love you, matiba. peace.r soul rest in god bless africa. i thank you. >> that was the president of south africa, jacob zuma talking about the death of nelson mandela, former south african president. he is dead today at the age of 95. don't forget this is a man who had been quite sick. really a tremendous legacy that that he behind and did live, really helping that
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country to dismantle its apartheid and really changing the face of that country and the region in so many ways. >> well, as president jacob zuma just said, to live as he lived, to not rest until we recognize his vision, that is what we must do now. he gave us a vision for a united south africa, and our goal is for a peaceful and prosperous not only south africa, but africa as a whole. that was his legacy. >> someone who was praised and valued around the globe. our own peter cook joining us right now, our senior washington correspondent, with a little more perspective on all that nelson mandela was able to accomplish in his life. peter? >> well, obviously just an incredible life. someone who had an impact not just in south africa, but globally and certainly here in the united states. president obama has talked
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often about nelson mandela. there are several members of congress who on more than one occasion have talked about mandela and the impact he has had not just on politics and life in south africa, but on politics around the world, even here in this country. a nobel peace prize winner. someone who the anti-apartheid movement here in the united states looked to when he was in prison in robin island and other places. his release in 1990 and going on to become the leader of south africa. lot of lessons to be learned from his life. i am waiting word not only from the white house, but the congress and their reaction to the deaths of nelson man -- mandela. >> you did some reporting on president obama's south african trip, where president obama was very mindful of mr. mandela's
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health. remind the viewers of what president obama did when he went to south africa several months ago? >> well, again, i wasn't on that trip, but there was oncern, some talk even then. nelson mandela was in failing health at that time. that perhaps his visit to south africa could coincide with nelson mandela, his illness. he didn't go visit directly with nelson mandela at the time. their two lives, given their places in history, have intersected somewhat. we are waiting to hear what president obama says about nelson man tele. would not be surprised to have him appear on camera to discuss his legacy not only in south
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africa, but in the united states. there is a new movie out now about nelson mandela and his journey from an activist at the african national congress, to his imprisonment, his release and his rise to lead south africa, the incredible rise to lead south africa. no word exactly on what the president can say or when real hear something from president obama. i would think it would be in the not too distance future. not long ago the president himself was in africa and talked about the health of nelson mandela. >> amazing to think that this man served 27 years in prison. incredible. and then went on to lead stojakovic from 1994 to 1999 as president. what he has witnessed, and the example that he has set, the
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first black man to be the president of south africa. it is incredible, the hatred that we associate with south africa of the 1970's, and the forgiveness through nelson mandela of the 1990's. incredible what he has done. >> you think about south africa today and how it has become such a vibrant place, and a vibrant economy. that is the legacy of this man, what he was able to accomplish, putting that country on a path to accomplish so much more. we were talking today to the c.e.o. of marriott, who is now making a big investment in africa. a lot of people looking to the region. and south africa in particular because its economy has done so well. it's people have done so well. that is really thanks to nelson mandela and all that he was able to accomplish in taking down apartheid. >> democracy. >> nelson mandela, passed away
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today at 95. we will leave it there. see you back here tomorrow for more "street smart."
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>> nelson mandela as died today. it has just been announced. nelson mandela, who spent 27 years in prison. he was the first black elected president of stojakovic in 1994. let's learn more about his life. >> a freeman taking his first steps into a new south africa. >> from prisoner to president. nelson mandela's 1990 release from jail signaled the end of south africa's racist policy of apartheid. he would go on to become the untry's first true democratically elected lea


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